Private-sector job creation was softer-than-expected in July

U.S. businesses added fewer jobs in June than economists anticipated, indicating that the job market improvement isn’t gaining traction as quickly as hoped.

Private-sector payrolls in the U.S. climbed by 218,000 in July, according to a report by payroll processor Automatic Data Processing (ADP) and analysis provider Moody’s Analytics (MCO). Economists had expected the ADP report to show a gain of 230,000, according to data compiled by Bloomberg.

“The July employment gain was softer than June, but remains consistent with a steadily improving job market,” Mark Zandi, chief economist of Moody’s Analytics, said. “At the current pace of job growth unemployment will quickly decline. Layoffs are still receding and hiring and job openings are picking up.”

The June ADP employment increase remained unchanged at 281,000 jobs, as reported previously. The ADP data excludes government payrolls.

The ADP report is issued ahead of the Bureau of Labor Statistic’s monthly employment situation, which is set to come out this Friday. The BLS report includes nonfarm payrolls, the unemployment rate and other data. Economists expect it to show 231,000 jobs were created in July, while the unemployment rate is projected to stay steady at 6.1%.

“If current trends continue, the economy will return to full employment by late 2016,” said Zandi.

ADP’s findings showed that the profession and business services segment reported the strongest growth in July, followed by the trade, transportation and utilities sector. The employment gains were spread across employers of all sizes, with companies with 50 to 499 employees adding the most jobs last month.